Short-term rentals in Atlantic City face new regulations

Short-term rental hosts in Atlantic City, New Jersey, have new rules to follow after the City Council passed two laws regulating vacation rentals.

Under the new regulations now in effect, vacation rental operators must obtain short-term rental licenses that require a $150 application fee and an inspection. Annual licensing fees cost $1,000 for properties with a maximum occupancy of six people, $1,500 for rentals that can accommodate between seven and 11 people, and $1,800 for rentals that can house 12 to 16 people.

Only property owners may apply for a short-term rental permit. Applicants must identify the person in charge of the property, and that person must be available 24 hours a day, seven days a week and respond within one hour to any issues. Applicants must also be up to date on property tax payments and utility charges and must have short-term rental liability insurance coverage of at least $500,000.

The laws also set out rules for parking, occupancy limits, and prohibiting guests under age 21 from renting vacation properties. Condominium properties must have approval from their associations to offer short-term rentals.

Under the new rules, short-term rentals in the Chelsea neighborhood may only operate in the area between Annapolis, Jackson, Albany, and Raleigh avenues. Hosts in Chelsea with a valid certificate of occupancy issued in 2020 can operate this year, but no new permits will be issued for Chelsea operators in 2021.

Short-term rental operators who violate the proposed ordinance can face fines of up to $2,000 per day. The city is launching an online portal this week for vacation rental operators.

Short-term rental hosts in Atlantic City who use short-term rental platforms for their listings are subject to state sales tax and occupancy fees. New Jersey short-term rental hosts are required to register with state tax authorities and collect these taxes from their guests. Airbnb and Vrbo collect state occupancy taxes and fees from guests on behalf of their hosts in Atlantic City.

MyLodgeTax can automate and simplify lodging tax compliance. For more on short-term lodging taxes in New Jersey, see our state Vacation Rental Tax Guide. 

Jersey City has also cracked down on short-term rentals. In 2019, voters defeated a referendum that would have overturned the city’s strict vacation rental law. Jersey City’s law bans vacation rentals in buildings with more than four units and limits short-term rentals to 60 days per year when the owner is not on-site.